Pernod Ricard plea against rejection of application for wholesale liquor license not maintainable: Delhi High Court

The Delhi High Court on Tuesday held that the plea by French liquor giant Pernod Ricard challenging the Delhi excise department's refusal to grant the company an L-1 license for wholesale supply of liquor in the national capital is not maintainable..Justice Prathiba M Singh permitted the company to approach the appellate authority under the Excise Act, 2009 to challenge the refusal."This Court, accordingly holds that the present writ is not maintainable in view of the express statutory provision which permits the Petitioner to approach the Appellate Authority against the impugned order dated 13 2023 in term of section 72 of t he Excise Act, 2009...The Petitioner is permitted to approach the Appellate Authority under the Excise Act, 2009 by filing an appeal within two weeks. If such an appeal is filed within the period prescribed, the same shall not be dismissed on the ground of limitation," the order stated.The Bench added that it has not gone into the merits of the case. .Pernod Ricard India (PRI), the India subsidiary of Pernod Ricard, had approached the High Court challenging the the Delhi excise department's decision denying the company an L-1 license. The company had sought a license for wholesale vending of alchohol brands including Imperial Blue, Royal Stag, Blender's Pride and 100 Pipers.Prior to its application for the license, the Enforcement Directorate (ED) had arrested one of its executives, Binoy Babu, in the alleged Delhi excise policy scam.The government had rejected the petitioner's application citing Sections 13(1)(c), 13(1)(4) and 44 of The Delhi Excise Act. These provisions provide that the license should not be given to companies that employ people having a criminal background..It was Pernod Ricard's case that there has been no provisional attachment of the company's accounts. It argued that it employs over 5,000 people across the country and that the ED has arrested only one regional manager.In its plea, Pernod Ricard stated that it applied for the L1 license first in August 2022 for two of its manufacturing units. However, the excise department failed to decide the applications.The Court was told that in September 2022, the excise department even issued a letter approving the grant of license to the firm, but no action was taken pursuant to this letter.In fact, the excise department directed PRI to submit police verification certificates (PVC) under Section 13(c) of the Excise Act, 2009 within three days, even though such a condition is usually imposed after the grant of the L1 License, the plea stated..Taking note of documents supplied by the ED and the Central and Bureau of Investigation (CBI) in relation to the investigation against the company's employees, the Court noted,"The allegations made therein against the Petitioner and its employees are serious and cannot be dismissed outrightly as the same are relevant to the liquor business of the Petitioner and thus is directly connected to the Excise licence."The Bench went on to observe that in the case of a corporate entity like Pernod Ricard, whose employees are not claimed to have acted in their individual capacity, the said allegations could not have been brushed aside by the Licensing Authority. "Moreover, the allegations also reveal that the employees represented themselves to be acting for Pernod Ricard. The allegations go to the root of good corporate governance of a company like the Petitioner," Justice Singh held. She added that a case of this nature, which raises serious allegations against the petitioner, would require examination of facts. Thus, the Court could not exercise its extraordinary writ jurisdiction under Article 226 of the Constitution to grant Pernod Ricard relief..Senior Advocates Mukul Rohatgi and Akhil Sibal, along with Advocates Anuj Berry, Anusha Ramesh, Megha Janakiraman, Neharika Modgil and Tejaswita appeared for Pernod Ricard.The Delhi government was represented through its Standing Counsel (Civil) Santosh Tripathi as well as Advocates Arun Panwar, Pradyumn Rao, Utkarsh Singh and Kartik Sharma. .[Read Order]